Fitch Ratings has published a sector-specific report for rating state
housing finance agency (SHFA) sponsored mortgage insurance or guarantee
fund programs. The report identifies factors considered by Fitch in
assigning ratings to SHFA sponsored mortgage insurance or guarantee
funds within the scope of the criteria. No changes to the ratings of
existing programs are anticipated as a result of the publication of the
rating criteria.

Fitch has identified four key rating drivers that affect the credit
quality of mortgage insurance or guarantee fund programs:

--Risk-to-Capital Ratio/Financial Profile: Fitch views the primary
driver of the rating to be the program's risk-to-capital ratio. This
ratio measures the total potential claims risk of an insured loan
portfolio to the insurance fund's dedicated reserves and available
capital for claim payments.

--Operating Cash Flow Sufficiency/Liquidity: The analysis includes an
assessment of the mortgage insurance fund's ability to generate cash
flow from operations to cover potential claim payments, additional risk
from new insured loans and debt payments (if any). Fitch also reviews
the fund's reserve levels and quality of investments given that these
reserves are the primary or only source of capital to cover losses from
the insured portfolio.

--Insured Portfolio: Fitch views the level of risk in a mortgage
insurance fund's portfolio and the quality of the insured
loans/mortgages as another key credit component in the analysis. In
order to assess the level of risk and quality, Fitch reviews the
program's loan underwriting standards for insured loans/projects, size
of the loan portfolio, types of loans being insured, concentration
within the risk portfolio, and the direction of state economic trends.
/p>

--Governance and Management: An assessment of management capabilities
and oversight is an important factor in assessing the quality of a
mortgage insurance fund. As part of this review, Fitch evaluates the
history of financial operations, staff experience and continuity,
program oversight abilities, disclosure abilities and the composition of
the SHFA's board, and their level of participation with the program.
Fitch also reviews the history of management's relationship with the
state and any past transfers of reserves (and/or the ability to transfer
reserves) out of the program.

The criteria report outlines how Fitch evaluates these factors in its
rating analysis of mortgage insurance or guarantee fund programs.

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND
DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING
THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS.
IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE
AVAILABLE ON (News - Alert) THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'.
PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS
SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS
OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES
AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF
THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE
RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR
RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY
CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH
WEBSITE.